Eicher Motors Limited · NSE:EICHERMOT
Eicher Motors — Q1 FY2023-24 Earnings Presentation
75 slides from Eicher Motors's earnings presentation, Aug 3, 2023
Slide 1: Regulation 30 investor presentation intimation letter
August 03, 2023 Online intimation/submission The Secretary The Secretary BSE Limited National Stock Exchange of India Ltd Phiroze Jeejeebhoy Towers Exchange Plaza, 5th Floor, Plot No.C/1, Dalal Street G Block, Bandra Kurla Complex, Bandra (E) Mumbai-400 001 Mumbai-400 051 Security Code: 505200 Symbo
Slide 2: Q1 FY 2023-24 Investor Presentation
EICHER MOTORS Q1 FY 2023-24 INVESTOR PRESENTATION AUGUST, 2 0 2 3
Slide 3: Safe Harbour Statement
SAFE HARBOUR STATEMENT All statements included or incorporated by reference in this presentation, other than statements or characterizations of historical fact, are forward-looking statements. These forward-looking statements are based on our current expectations, estimates, and projections about ou
Slide 4: Contents
CONTENTS 1. EML Overview 2. Royal Enfield ● Product ● Industry ● Business Performance ● Operations Overview ● Brand ● Sustainability 3. VECV 4. Financial Review INVESTOR PRESENTATION August 2023
Slide 5: Group Structure - Eicher Motors Ltd.
GROUP STRUCTURE - EICHER MOTORS LTD. Domestic Foreign Institutional Institutional Promoter Group Investors Investors Others 49.17% 30.27% 10.13% 10.43% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Eicher Motors Limited (EML) Joint Venture with Volvo Group Business Unit 45.6 54.4 Royal Enfield (RE) VE
Slide 6: EML Board
EML BOARD Leaders with proven track record S Sandilya Siddhartha Lal B. Govindarajan Chairman, EML Managing Director and CEO, EML CEO - Royal Enfield, Whole Time Director Vinod K. Aggarwal Inder Mohan Singh Manvi Sinha Non-Executive Director Independent Director Independent Director INVESTOR PRESENTA
Slide 7: Royal Enfield
ROYAL ENFIELD INVESTOR PRESENTATION 6 August 2023
Slide 8: Our Purpose
OUR PURPOSE Innovation for sustained Royal Enfield’s philosophy of Pure Ma exploration n rai Motorcycling has always been about a ch Ter constant search for balance between ine people, machine and terrain. Today, in a world out of sync with itself, we must SUSTAINABILITY extend this quest to our busi
Slide 9: Evolution of Our Company
EVOLUTION OF OUR COMPANY Royal Enfield is the global leader in the 250cc – 750cc, mid-weight motorcycles segment. With ~90% market share in the Indian mid-weight segment, we have rapidly grown our presence across the world with more than 1,029+ retail touchpoints across 60+ countries. Our world-class
Slide 10: Growth Focus ICE and EV Sustainability
GROWTH FOCUS ICE AND EV Balance - Profit & Profitability Balance - EV as game changer along with ICE SUSTAINABILITY BRAND LED CX Balance - Social & Commercial Brand led Customer objectives Experience versus transactional focus CREATE AGILE, RESILIENT & TIMELESS BUSINESS STRATEGIC APPROACH INVESTOR PRE
Slide 11: Royal Enfield Management
ROYAL ENFIELD MANAGEMENT Team of Global Professionals Siddhartha Lal B. Govindarajan Mark Wells Mohit Dhar Jayal Simon Warburton Paolo Brovedani Mahesh Tripathi Managing Director & CEO, EML CEO – Royal Enfield Chief of Design Chief Brand Officer Chief Program Manager Chief of Product Development Chief
Slide 12: Product Portfolio
PRODUCT PORTFOLIO INVESTOR PRESENTATION August 2023
Slide 13: Iconic Timeless: Bullet, Classic
ICONIC TIMELESS BULLET 350 CLASSIC 350 INVESTOR PRESENTATION 12 August 2023
Slide 14: Cruiser: Meteor, Super Meteor
CRUISER METEOR 350 SUPER METEOR 650 INVESTOR PRESENTATION 13 August 2023
Slide 15: Roadster: Hunter, Interceptor
ROADSTER HUNTER 350 INTERCEPTOR 650 INVESTOR PRESENTATION 14 August 2023
Slide 16: Adventure: Himalayan, Scram
ADVENTURE HIMALAYAN SCRAM 411 INVESTOR PRESENTATION 15 August 2023
Slide 17: Cafe Racer: Continental GT
CAFE RACER CONTINENTAL GT 650 INVESTOR PRESENTATION 16 August 2023
Slide 18: Industry
INDUSTRY
Slide 19: Domestic Motorcycle Market
DOMESTIC MOTORCYCLE MARKET INVESTOR PRESENTATION 18 August 2023
Slide 20: Opportunity - Domestic Market
OPPORTUNITY - DOMESTIC MARKET Rising Income India Opportunity The expansion of the middle class and high-income 2 Wheeler: 21M Market segments will reshape future consumption and drive incremental Motorcycles: 13.5 M consumption of US$ 4 trillion by 2030 >125cc: 3.2M Source: World Economic Forum - F
Slide 21: Launch of Classic in 2009 was an inflection point
LAUNCH OF CLASSIC IN 2009 WAS AN INFLECTION POINT Launch of “ New Classic 350” and “Scram 411” Launch of “650 Twins” Launch of “Hunter 350” and “Super Meteor 650” Launch of Launch of “Himalayan” Launch of “Continental GT” “Meteor 350” Launch of new “Thunderbird” and “Apparel and Accessories” Transit
Slide 22: Gaining market share in the >125cc segment
GAINING MARKET SHARE IN THE >125cc SEGMENT INVESTOR PRESENTATION 21 August 2023
Slide 23: Global Mid-size Market is underserved and is a huge opportunity
Global Mid-size Market is underserved and is a huge opportunity Americas Market Share^ APAC Market Share EMEA Market Share 8% 9% 9% th row eG o l um 4.5x V 1 Million+ Opportunity* *Management estimate of the total middleweight motorcycle volumes in the priority markets for Royal Enfield. ^Reflects Roy
Slide 24: Business Performance
BUSINESS PERFORMANCE
Slide 25: Royal Enfield's Global Footprint
ROYAL ENFIELD’s GLOBAL FOOTPRINT UK Subsidiary India Tech Center Tech Center Manufacturing Canada Subsidiary South korea North America Japan Subsidiary Brazil CKD Thailand CKD Mexico (Dis) & Brazil Subsidiary & Thailand Subsidiary Subsidiaries - 05 Nepal (CKD) (Dis) Colombia (CKD) (Dis) CKD - 05 Mal
Slide 26: Expansive Premium Distribution Network in India
EXPANSIVE PREMIUM DISTRIBUTION NETWORK IN INDIA 1,092 stores and 942 studio stores across ~1,750 cities Store count ▪ Large stores ▪ Studio stores North 329 | 315 East West 233 | 226 199 | 109 City Category wise Distribution* Category Store Count South Chennai Royal Enfield currently A+, A 259 ▪ Glob
Slide 27: Rapidly Growing International Network
RAPIDLY GROWING INTERNATIONAL NETWORK 1,029+ global touchpoints with 210 Exclusive stores & 819+ MBOs Exclusive Multi Brand Exclusive Multi Brand Exclusive Multi Brand Store Outlet Store Outlet Store Outlet UK, MEA, Americas 92 214 68 495 APAC 50 110 Europe, Subsidiary - USA Technology Centers – UK
Slide 28: Share of International Revenue Growing
SHARE OF INTERNATIONAL REVENUE GROWING Network Expansion and Touch Points International Business – Stellar Financial New Retail formats - Studio stores, Shop-in-shop for apparel, and motorcycle displays to increase Performance over last 7 years customer reach. Network expansion in key developing mar
Slide 29: Non-Motorcycle Business
NON-MOTORCYCLE BUSINESS Provide frictionless experience for RE Riders Non Motorcycle Business - 4X Revenue growth over the last six In Store Opportunity years in non motorcycle segment Accessories Apparel Explore new revenue pool from adjacencies In Use Opportunity Roadside Spares Assistance Annual
Slide 30: Building Capabilities to Cater to a Global Audience
BUILDING CAPABILITIES TO CATER TO A GLOBAL AUDIENCE In English Bruntingthorpe, UK Chennai, India World-class facilities midlands with with multiple Teams access to global working from product concept stage to development production Advanced capabilities and Engineering and EV ecosystem New Product t
Slide 31: EML - Stark Future Partnership
EML - STARK FUTURE PARTNERSHIP 01 Common tenets of long term vision 02 Deep understanding of EVs and connected - tech Technical Collaboration 03 Agreement - potential for joint development and sourcing 04 World class team - Faster product development Sourcing relationships 05 Sourcing relationships
Slide 32: Operations Overview
OPERATIONS OVERVIEW
Slide 33: Thiruvottiyur, Oragadam, Vallam
THIRUVOTTIYUR ORAGADAM VALLAM No Assembly 600,000 600,000 operations; Capacity Capacity Plating & motorcycles per motorcycles per Auto buffing annum annum INVESTOR PRESENTATION 32 August 2023
Slide 34: Nepal CKD Launch
NEPAL CKD LAUNCH Stories across 126 key publications 116 Million Potential Reach 30+ Media engaged in Nepal Royal Enfield’s plans for Nepal market Organized Community Ride X Press Conference RE’s fifth CKD facility was inaugurated in Nepal X Media Round Table for media followed by on the sidelines of
Slide 35: Best in Class Technology Delivering Superior Quality
BEST IN CLASS TECHNOLOGY DELIVERING SUPERIOR QUALITY VEHICLE ASSEMBLY ENGINE ASSEMBLY SURFACE FINISHING ▪ Assembly line flexibility - 256 SKUs ▪ Automation of critical sub assembly ▪ 46 robots deployed to achieve superior can be produced (including MiY) operations paint finish and better transfer ▪ Nu
Slide 36: Best in Class Technology Delivering Superior Quality
BEST IN CLASS TECHNOLOGY DELIVERING SUPERIOR QUALITY MACHINING FABRICATION AUTO BUFFING ▪ Total no of machining centers across ▪ Improved ride & handling experience ▪ Two stage automated buffing process plants - 340 achieved by 100% robotic welding of enhance the aesthetics of plating ▪ Process capab
Slide 37: Delivering the Pure Motorcycle Experience
DELIVERING THE PURE MOTORCYCLE EXPERIENCE Make It Yours - a unique motorcycle Studio Stores - Unique compact store Royal Enfield Vintage - Transparent sale personalization initiative format with 3S store offerings and purchase of pre-owned RE motorcycles Royal Enfield Garage Café, Goa - RE App - 3D co
Slide 38: Enhancing Consumer Experience
ENHANCING CONSUMER EXPERIENCE SALES SERVICE PRODUCT Field Failure – Defects per Hundred Bike 5X Redu DPHB ctio n 2016 2017 2018 2019 2020 2021 2022 Store and Online experience Service on Wheels & Ride Sure Product Quality Excellence ▪ Sales Process excellence ▪ The Ride Sure programme with a ▪ Valla
Slide 39: Brand
BRAND
Slide 40: The first Royal Enfield
1901 The first Royal Enfield motorcycle is produced. Designed by R. W. Smith and Frenchman Jules Gotiet, it hasa 11/2 hp Minerva engine mounted in front of the steeringhead. The final drive \s at the rear wheel by means of along rawhide bet. 1943 Royal Enfield produces large quantities of motorcycle
Slide 41: Ladakh Scouts x Royal Enfield Ride | Flag Off
LADAKH SCOUTS X ROYAL ENFIELD RIDE | FLAG OFF Ladakh Scout’s motorcycling expedition to showcase and highlight our connect with the Indian Armed forces INVESTOR PRESENTATION August 2023
Slide 42: Apparel
APPAREL INTERNATIONAL BUSINESS ART OF MOTORCYCLING Top 5 Winners of Art Of Motorcycling Season 3 X Gaining momentum Build Brand A new fit to cater Awareness and With more than 54,000 registrations, the third with a footprint of to APAC and US over 70 markets credibility with regional season of the #A
Slide 43: Royal Enfield x Ice Hockey
ROYAL ENFIELD X ICE HOCKEY Royal Enfield announced The partnership is an Royal Enfield is currently its partnership with the extension of the relationship working with all Indian women’s Ice Hockey of Royal Enfield with UT stakeholders to grow Ice team in an effort to Ladakh in order to develop Hockey,
Slide 44: 'Digital First' approach
Royal Enfield X NCW Himalayan Odyssey Riders Club Of Europe Slide School One Ride GT Cup - 2022 Finale Round 90° South The Great Himalayan Astral Ladakh Himalayan Zanskar Exploration ‘Digital First’ approach The largest, fastest On-ground and growing and the most on-line communities engaged online to
Slide 45: Strong Brand Equity
STRONG BRAND EQUITY #1 85% Mode of Self Consideration Expression #1 47% Top of Mind Awareness 31 percentage points ahead of our closest 31 percentage points competitor ahead of our closest *Internal Kantar report on Brand Health Track - AMJ’2023 scores Community competitor Driven ● Among the host of
Slide 46: One of the World's Strongest Fully Organic Social Media Community
10.7 MILLION ONE OF THE WORLD’s STRONGEST FULLY ORGANIC SOCIAL MEDIA COMMUNITY INSTAGRAM LINKEDIN YOUTUBE FACEBOOK TWITTER INVESTOR PRESENTATION 45 August 2023
Slide 47: Leading Premium Consumer Brand
LEADING PREMIUM CONSUMER BRAND SHARE OF VOICE* NET SENTIMENT 42% VS 92.3% SHARE OF MARKET 7.6% *Share of Voice in the Global 2W Space Royal Enfield’s Market Share in the Indian Motorcycle Segment INVESTOR PRESENTATION 46 August 2023
Slide 48: Social media reach and engagement
#IndiaIceHockeyXRoyalEnfield #RoyalEnfieldTwins #ThisisScramCity #ArtOfMotorcyclingS3 #Meteor350 Total Average #CruiseCandid Total Engagement Reach* Engagement per Brand post 56M 3.9M 2364 #DugDugAaweRe #BikeShedMotoShow Engagement #WorldMusicDay Total Views Rate^ 25M 7% #REvault #HimalayanOdyssey2023
Slide 49: Sustainability
SUSTAINABILITY
Slide 50: Pillars of Sustainability Journey
PILLARS OF SUSTAINABILITY JOURNEY Environmental Social Governance ▪ Become water positive ▪ Ride for a cause ▪ Strategy, execution and ▪ Attain Carbon neutrality ▪ Disaster relief activities monitoring ▪ Work towards zero liquid discharge ▪ Village upgradation programmes ▪ Risk management ▪ Eliminat
Slide 51: Green Business Operations
GREEN BUSINESS OPERATIONS Optimising Energy Consumption Emission Management 80% targeted emission ● Implementation of VFD in EPC ● Committed to reducing emissions 01 intensity reduction per AHU, helping reduce frequency like PM, SOx, and NOx motorcycle by FY29-30 (50 hz to 40 hz) and power ● Periodi
Slide 52: Passion with Responsibility
PASSION WITH RESPONSIBILITY Women’s Safety and Gender Equality Awareness Helmet and Road Safety Awareness with the National Commission of Women ■ To promote the cause of helmet adoption and road safety through a ■ In an attempt to create a safe space and a gender-neutral society, Royal unique initia
Slide 53: Among the Industry Leaders in Sustainability
AMONG THE INDUSTRY LEADERS IN SUSTAINABILITY ESG Score 62.0 Eicher Motors is listed in the DJSI Emerging Markets Index for the second year in a row, and has maintained its position among the top 3 automotive sector leaders in India and top 10 globally. ESG Reporting Eicher Motors has been reporting
Slide 54: ESG Performance Overview
ESG PERFORMANCE OVERVIEW Eicher Motors ranks among the sector leaders in major ESG ratings Morgan Stanley Capital Sustainalytics International (MSCI) #8 out of 89 in Among the the toptop 10 auto 8 out of 89 in A Among companies 10 Auto globally MSCICOmpanies ratings in 13.3 the Automotive the Automo
Slide 55: Volvo-Eicher Commercial Vehicles
VOLVO-EICHER COMMERCIAL VEHICLES INVESTOR PRESENTATION 54 August 2023
Slide 56: Joint Venture since 2008: Merging the best of both worlds
Joint Venture since 2008: Merging the best of both worlds VISION AND VALUES Respect ▪ Global expertise To be recognised as the ▪ Leadership in product technology industry leader driving Fair and Ethical modernization in ▪ Well defined processes and controls commercial ▪ Brand image Excellence transpo
Slide 57: Q1 FY24 Strongest ever first quarter deliveries across segments
Q1 FY 24 .. Strongest ever first quarter deliveries across segments • Highest ever first quarter sales of 19,571 units exceeding previous record of 17,469 units in Q1-FY’23 • HD Trucks (combined Volvo and Eicher) - Highest ever first quarter sales of 5,166 units ( FY23 Q1 – 4,006 units) and market shar
Slide 58: Business Outlook
Business Outlook: India's economy remains strong; risks from global geo-politics ● World Bank projection of India’s FY24 GDP growth at 6.3% ● Jun’23 GST collection at INR 1.62 trillion with 12% YOY growth ● CPI inflation moderated for 4th successive month to 4.3% in May’23 led by lower food inflation
Slide 59: Product range: Seamless transition to BS VI OBD II
Product range…Seamless transition to new BS VI OBD II emission standards INVESTOR PRESENTATION 58 August 2023
Slide 60: Creating a Strong & distinct association with Uptime
Creating a Strong & distinct association with Uptime.. INVESTOR PRESENTATION 59 August 2023
Slide 61: MyEicher: 14 Million monthly visits by 69,000 customers
MyEicher…14 Million monthly visits by 69,000 customers CV Industry Leading App ➢ Single Window to monitor all Business KPI’s: Sales, Service, Spares, EOS, My Eicher, Soft Products. ➢ Actionable Insights to Review Operations: Model Wise Reporting, Manpower Productivity etc. ➢ On Demand Availability o
Slide 62: Continuing focus on e-mobility
Continuing focus on e-mobility…New e-Bus orders under execution in Kerala Advanced projects for Small Commercial Vehicles, Hydrogen ICE, Fuel Cells, Batteries, LNG and Bio-blends INVESTOR PRESENTATION 61 August 2023
Slide 63: Strengthened market share in all segments
Strengthened market share in all segments Light & Medium Duty Trucks Heavy Duty Trucks 36.9% 8.5% 25.3% 1.3% FY 2009 YTD FY24 FY 2009 YTD FY24 Buses Volvo Trucks India* 24.7% 94.7% 72.6% 5.3% FY 2009 YTD FY24 FY 2009 YTD FY24 *Market share in high end premium segment INVESTOR PRESENTATION 62 August
Slide 64: Consistent Financial Performance Despite Headwinds
CONSISTENT FINANCIAL PERFORMANCE DESPITE HEADWINDS Total CV# Volumes and Market Share Total Revenue (in nos and %) Total revenue from operations (net of excise duty) EBITDA^ and Margins Profit After Tax CV# - Commercial Vehicles (Domesic sales) The figures in % indicate EBITDA Margins EBITDA – Earni
Slide 65: YTD Financial Highlights
YTD FINANCIAL HIGHLIGHTS Total Revenue from Operations EBITDA^ and Margins Profit After Tax EBITDA – Earning Before Interest ,Tax, Depreciation and Amortisation ^For the purpose of EBITDA computation, only interest income (part of other income) has been excluded from Total Income The figures in % ind
Slide 66: Our Journey: Performing and Transforming
OUR JOURNEY… PERFORMING AND TRANSFORMING Profitable Sustainable Products & Operations Future Ready INVESTOR PRESENTATION 65 August 2023
Slide 67: Financial Review
FINANCIAL REVIEW
Slide 68: Inclusive Stakeholder Management Policies
INCLUSIVE STAKEHOLDER MANAGEMENT POLICIES With global operational and retail footprints and social initiatives that span the length and breadth of India and International markets, EML has a diverse stakeholder base Gunning for Improving Improving Value Growth Returns Creation ▪ Rise in utilization o
Slide 69: Significant Value Creation for All Stakeholders
SIGNIFICANT VALUE CREATION FOR ALL STAKEHOLDERS Market Capitalisation (INR Billions) 133x returns over last 14 years INVESTOR PRESENTATION 68 August 2023
Slide 70: Consistent Delivery Leading to Strong Cash Accruals
CONSISTENT DELIVERY LEADING TO STRONG CASH ACCRUALS Total Sales Total Revenue from operations EBITDA and Margin Motorcycle Volumes ('000) PAT Net Cash OCF Net Cash = Cash and cash equivalent – Total debt All figures are in INR Crs unless specified INVESTOR PRESENTATION 69 August 2023
Slide 71: YTD Financial Highlights
YTD FINANCIAL HIGHLIGHTS Total Sales Revenue from operations Motorcycle Volumes ('000) EBITDA and Margin PAT All figures refer to EML Consolidated numbers and are in INR Crs unless specified INVESTOR PRESENTATION 70 August 2023
Slide 72: Profit & Loss Statement (Consolidated)
PROFIT & LOSS STATEMENT (Consolidated) Profit and Loss Account FY19 FY20 FY21 FY22 FY23 Q1 FY24 Sales Volume: Two Wheelers (Nos.) 822,724 697,582 609,403 595,474 824,066 225,368 Total revenue from operations (net of excise) 9,797 9,154 8,720 10,298 14,442 3,986.37 Manufacturing and other expenses 6,8
Slide 73: Balance Sheet (Consolidated)
BALANCE SHEET (Consolidated) Particulars FY19 FY20 FY21 FY22 FY23 Net Fixed Assets (including CWIP and 2, 324 2,690 2,748 2,929 3.162 Pre-operative Expenditure) Investments 4,923 5,749 3,902 7,721 12,101 Other Non Current Assets 180 102 125 165 252 Current Assets Inventories 633 572 875 1,132 1,278
Slide 74: Statement of Cash Flows (Consolidated)
STATEMENT OF CASH FLOWS (Consolidated) Particulars FY19 FY20 FY21 FY22 FY23 Profit before tax and after share of profit of 3,297 2,355 1,798 2,203 3,800 Joint venture Operating profit before changes in working 2,941 2,236 1,912 2,172 3,552 capital Net Changes in working capital (457) 86 258 (103) 66 Ca
Slide 75: Royal Enfield
Royal Enfield Royal Enfield Royal Enfield INVESTOR PRESENTATION February 2023